Look who's talking about BT problems

Hard-pressed BT is coming under fire from its staff for a 'crumbling' phone network. In the latest edition of in-house journal BT Today, customer service agent Robin Rule warns that engineers are sacrificing quality to meet performance targets, and says: 'The fault rate is going through the roof. The network is crumbling through years of neglect.'

BT's managing director for UK customer service, Patricia Vaz, replies: '[This] is no surprise to me.' She admits there are 'too many faults' throughout the system and even acknowledges that shoddy repairs are leaving yet more faults. In an attack on management, Vaz blames 'a lack of investment' for making problems worse.

BT is going on a hiring spree in a bid to turn the situation around. It has recruited an extra 1,800 engineers over six months and is looking for another 1,000.

Yet the problem is further evidence that BT is under unprecedented pressure from competitors. The shares, at 982p , have plunged by a third since December and underperformed the telecoms sector by more than 25% in a year. Broker Salomon Smith Barney recently argued BT was not spending enough to keep up with rivals such as Colt and Cable & Wireless.

Now BT is breaking precedent and challenging Oftel in the courts. It is appealing about the regulator's ruling that, from next year, it must pay half the cost of installing auto-diallers in homes to route calls through rival networks.